The Miami office market continues to be extremely strong, with low vacancy rates across the board and a stream of new-to-market tenants coming to take advantage of all Miami has to offer. At Bisnow’s 8th Annual “Miami State of the Market” event, South Florida’s leading real estate experts converged to discuss the key trends influencing the market, while offering their insight on what’s to come.
Cushman & Wakefield’s Brian Gale, Vice Chairman, who leads the market’s top office landlord representation teams, moderated the panel discussion, “2019 Forecast: Capital Flow, Investment Sales and Leasing.” The panel consisted of Angelo Bianco of Crocker Partners, Leandro Barbuscio of Kaufman Rossin, Andrew Zech of Greenworks Lending and Alan Kleber of JLL. Here are some highlights from the engaging discussion:
Downtown’s Transformation to Live-Work-Play
Twenty years ago, downtown Miami was primarily a daytime environment. Without much of a residential component, the district all but shut down at 5 p.m. But panelists agreed that things changed with the condo boom that began about a decade ago. Angelo Bianco with Crocker Partners remembers seeing a woman jogging through downtown one evening and thinking it was so unusual to see someone doing anything other than walking to and from lunch and business meetings in that area. Seeing downtown transforming into a live-work-play destination renewed Crocker Partners’ interest in developing in the area. The addition of residences as well as world-class restaurants and retail has been very positive for the office market, and this trend should continue as the Downtown Miami and Brickell areas continue to develop, panelists said.
Proximity to quality public transportation options has become an increasingly common requirement of today’s office users. The addition of the Brightline high-speed rail system has added a new layer to South Florida’s network of transportation options. It has changed the way people work, offering a fast and convenient commuting option, as well as a car-less way to get from one area of the market to another for client meetings, site tours, etc. Brian noted that Brightline has already changed the South Florida landscape and it has the potential to further elevate the Miami market as an international hub for business. He also noted that once Miami has a train which makes stops along the way, throughout Northeast Dade, then the game will change and people will truly leave their cars at home and come to work using mass transportation. Panelists expect more companies to consider closeness to the Brightline when looking for office space in the market.
Sustainability in development and construction of office buildings has become a national trend, of which South Florida is certainly part of. Panelists noted that Miami’s unique tax incentives encourage developers to build LEED certified properties and implement sustainable features like efficient air conditioning systems and lighting, recycled materials and even green spaces into their buildings. Sustainable design can increase an office building’s profitability by 30 to 50 percent for owners, one panelist noted, while also providing the alluring perk of lower utility fees for tenants.
With co-working space now accounting for 3 percent of the Miami office market – more than in any other state – it seems the trend is here to stay. JLL’s Alan Kleber noted that one-third of new to market tenants are going to co-working space, and it’s not just small-time entrepreneurs and freelancers, but large corporations with satellite offices as well. Panelists agree that co-working, so far, has been positive for the office market, as it creates competition for small spaces and serves as incubator space for growing companies that will eventually require traditional office space.
Bisnow’s 8th Annual Miami State of the Market was hosted by Wells Fargo Center in downtown Miami. Cushman & Wakefield handles the leasing for the property.
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